(中文)

在《港股除牌机制之解析（上篇）：规则概要及最新数据》中，我们分析了联交所除牌机制的规则和最新数据。近年，不少上市公司都因不符合《上市规则》第13.24条的规定，而被联交所停牌，甚至除牌。受到新冠疫情的影响，越来越多上市公司面对着不明朗的业务状况，因此也越来越多被停牌的上市公司被联交所要求证明其如何符合第13.24条的规定。在本篇中，我们将通过对《上市规则》、法庭判例以及成功复牌个案的研究为受影响的企业制定复牌策略提供参考。

（一）《上市规则》第13.24条

于2019年10月1日起生效的经修订的《上市规则》第13.24条规定上市公司须有足够的业务运作并且拥有相当价值的资产支持其运营，其证券才得以继续上市。而修订前的条文仅要求足够的资产或业务运作。

联交所在指引信GL106-19中列举了一些会应用第13.24条的情况，包括：

• 发行人只余极少量业务及收入，其业务规模及前景似乎均难以解释何以要付出上市所需的成本费用又或证明其寻求上市的目的。例如发行人的业务收入并不足够应付公司支出，出现净亏损之余，营运现金流亦呈负数；
• 发行人的业务多年来规模极小而且连年亏损，可见现时业务规模并非一时低迷；
• 发行人未能证明其有相当价值的资产支持其营运，产生足够的收入及利润令其得以继续上市；
• 发行人进行公司行动后只余极少量业务；
• 出现财政困难，严重损害发行人继续经营业务的能力，或令其部分或全部业务停止运作；
• 发行人破产，此可见于无争辩的清盘呈请、清盘令或委任临时或非临时清盘人；
• 发行人失去主要营运附属公司；
• 发行人缺乏具有实质的业务模式。

值得注意的是，联交所并不会仅仅因为上市公司被第三方申请清盘而指令上市公司停牌，也不会仅仅因为上市公司的子公司或上市公司的控股股东被第三方申请清盘而指令上市公司停牌。虽然如此，出现财政困难的上市公司很可能会因为其它原因，例如未能及时发布财务资料或部分或全部业务停止运作而被停牌。另外，出现财政困难的上市公司也可能因为等待公布内幕消息而主动申请停牌。

（二） 申请复牌准则

因没足够的业务运作或资产而被停牌的上市公司通常会根据《上市规则》第6.01A(1)条的规定进入18个月的复牌程序（创业板12个月）。在停牌期间，上市公司须向联交所提交其复牌建议，并在完成实行该复牌建议后才能申请复牌。

复牌建议须证明该上市公司拥有可行及可持续发展的业务，符合《上市规则》第13.24条的规定。虽然《上市规则》并无量化准则，但有关业务必须为实质，业务模式必须为可行及可持续发展。

如复牌建议涉及收购资产或向个别投资者大规模发行证券以换取现金发展新业务，联交所将引用反收购行动的条文，以确保有关建议并不触发相关的反收购规则，从而防止借壳上市来规避新上市规定的情况。倘若收购事项被联交所认为构成反收购行动，上市公司则必须向联交所提交A1申请，并附上所需文件，这将等同于新上市申请。

如是因财政困难而未能符合第 13.24 条，上市公司须公布其为解决财困而进行的公司行动，例如重组安排等。上市公司须在相关通函或公告中载列可佐证其经重组集团的业务是可行及可持续业务的资料。根据所披露资料，联交所可能就有关复牌的公司行动是否可行而提供指引，并可能要求上市公司提供额外数据（例如盈利预测）。

（三） 有关《上市规则》第13.24条的裁决

香港上诉法庭近期在中国趋势控股有限公司诉香港联合交易所有限公司（民事上诉案件2020年第652号）( China Trends Holdings Ltd v. Stock Exchange of Hong Kong Ltd (CACV 652/2020 )) 的裁决中，就《上市规则》第13.24条的要求作出了详细的解释：

• 《上市规则》第13.24条的审核乃属于质量性的主观评估而非量化的客观评估

• 因此，联交所须根据各上市公司的不同业务、行业状况营运、具体事实及特定情况而作出个别的个案评估

• 在此过程中，上市公司须证明其整体业务的可行性及可持续性，且不能单单依赖其资产、收入或偿债能力等个别因素来证明其业务的可行性及可持续性

此裁决与较早前的三元集团有限公司诉香港联合交易所有限公司（分别为终院民事杂项案件2009年第52号及民事上诉案件2008年第191号）(SanyuanGroup Ltd v. Stock Exchange of Hong Kong Ltd (FAMV 52/2009；CACV 191/2008 )的案例中就《上市规则》第13.24条作出的解释一致。总括而言，被停牌的上市公司证明其符合《上市规则》第13.24条的方式，将因应各上市公司的个别情况和业务而有所差异。

（四） 个案研究

尽管如此，我们可以透过参考过往曾因《上市规则》第13.24条而被停牌的上市公司成功复牌的案例，从而得出被停牌的上市公司能如何证明其有足够的业务运作并且拥有相当价值的资产以支持其营运。

(a)      成功的债务重组方案

裕承科金有限公司（股份编号：279）（主板）（于2020/2/28停牌，于2021/11/1复牌）

• 该公司从事证券及期货经纪、配售、包销及孖展融资业务，且提供保险经纪及理财策划服务。

• 该公司自2019年收到其多个认购人及借贷人的违约通知，要求该公司立刻偿还债务，并于其后收到其债权人向高等法院要求将该公司清盘的呈请。

• 基于上述的清盘呈请及其债务违约通知，该公司没有足够的资金以偿还其当前债务并继续其业务运营。

• 于是，该公司与其债权人积极沟通，以探讨该公司的债务重组方案。同时，该公司积极物色有意参与该公司债务重组方案的潜在投资者。

• 最后，该公司与新投资人签订该公司的重组方案契约，从而让新投资人将透过股份认购方式向该公司投入资金，从而解决该公司的债务问题，让公司有足够的资金继续其本身的业务运营。

(b)     改善原有业务

东方汇财证券国际控股有限公司（股份编号：8001）（创业板）（于2020/7/30停牌，于2021/7/31复牌）

• 该公司本身从事承销及配售业务、经纪业务、保证金融资业务及放债业务。

• 于2020年，该公司75%的股东于出售了其在该公司全部股权，令原有业务经营水平急剧恶化，该公司失去稳定的渠道来寻找或扩大客户群。

• 为改善该公司的原有业务，该公司推出了多项政策，包括员工激励计划及保证金融资业务客户的最低交易门槛要求等。

• 该公司积极探索新的业务商机，包括投资移民业务及资产管理业务。

• 该公司达到了其盈利预测所预期的收入及盈利，其2020年和2021年的收入分别为5,729万港元和6,010万港元，净利润则分别为2,983 万港元和3,251万港元。

• 综合上述的多个因素，联交所认为该公司的原有业务运营情况有所好转，且符合《上市规则》第13.24条的规定。

(c)     转亏为盈

国能集团国际资产控股有限公司（股份编号：918）（主板）（于2019/2/1停牌，于2020/12/7复牌）

• 该公司本身从事成衣业务,并仅于暂停买卖股份前不久开展了ACCAPI 业务及Super X 业务。

• 该公司积极发展其现有业务，包括成立内部设计团队、开展市场推广及宣传、积极拓展产品的销售渠道，并在微信小程序开设线上销售平台，亦加强其品牌知名度。

• 基于上述的努力，该公司的收入由2018/2019财政年度的96.4 百万增加到2019/2020财政年度的约210.2百万港元。该公司亦成功由2018/2019财政年度的净亏损约30.1百万港元转亏为盈至2019/2020财政年度的纯利约10.9百万万港元。

• 考虑到该公司的业务所取得的发展及财务业绩有所改善，联交所认为该公司已开展具有足够营运水平的业务，并拥有足够价值的资产以支持其业。

(d)     以原有业务为基础，开拓新业务，产生协同效应

亚洲果业控股有限公司（股份编号：73）（主板）（于2016/9/26停牌，于2020/9/1复牌）

• 该公司本身的种植业务拥有可靠的经营历史和收入记录以及可持续的客户群，其收入的下降乃基于暂时性的不利的气候条件和农业疾病等原因。

• 另外，该公司就其新拓展的水果分销业务与客户签署了多项销售框架协议及最低采购承诺。同时，该公司亦推出了新的优质橙子品牌，且该品牌获得广泛市场认可。上述的新业务均能帮助推进公司本身的种植业务。

• 此外，该公司达到了其盈利预测所预期的收入及盈利，该盈利预测甚至可满足《上市规则》8.05(1)(a) 规定的 2,000 万港元的盈利测试要求 。

• 该公司拥有足够价值的资产（其账面价值为人民币 9,210 万元），且该公司并不处于净负债状况。

• 综合上述的多个因素，联交所认为该公司符合《上市规则》第13.24条的规定，并允许其复牌。

（五） 如何符合第13.24条

参考上述的裁决及个案研究，被停牌的上市公司可以以下的方式证明其符合《上市规则》第13.24条：

• 积极开拓公司的原有业务或新的业务，如寻找新客户以签署新的销售框架协议、开拓其销售渠道以吸引更多客户等，以改善公司的运营情况。

• 证明公司的收入及盈利得以改善，如达到其盈利预测所预期的收入及盈利，及证明其拥有足够价值的资产且并不处于净负债状况。

• 寻找新的投资人注资，让上市公司有足够的资金继续其业务运营。需要注意的是，当引入新的投资人涉及公司控制权变更时，有可能会触及反收购行动的条文，从而令上市公司被视为新的上市申请人。

然而，如上述裁决所述，联交所就《上市规则》第13.24条所作的评估乃基于各上市公司的不同业务做出的整体、主观及质量性评估。因此，被停牌的上市公司须因应其独特的情况作出符合《上市规则》第13.24条的调整。上述个案仅能用作参考。

本文由本所企业融资部劳恒晃律师、张源辉律师、刘砚枫律师、叶庭宜律师及黄虹博士共同合著。如有任何疑问或需要进一步的信息，请联系我们的劳恒晃律师、张源辉律师或刘砚枫律师。

本文仅供参考之用。本文之内容不构成亦不应被视为法律意见。对于任何因资料不确或遗漏又或因根据或倚赖本文件所载资料所作决定、行动或不行动而引致的损失或损害，史蒂文生黄律师事务所概不负责。

(中文)

近年来受到新冠疫情的影响，越来越多上市公司面对着不明朗的业务状况。加上国内政府加强对各行各业尤其是房地产开发企业的监管措施，港股企业被停牌甚至最终被强制除牌的例子已不鲜见。根据香港联合交易所有限公司（「联交所」）的最新统计，2021年被强制除牌的港股企业达到34家，再创新高。

我们将在一连两篇的系列研究文章中对港股企业停牌的原因、复牌的条件及除牌的过程进行详尽分析，并结合数据统计及个案研究，以期为港股企业提供参考。

在本篇中，我们将首先对港股上市公司的停牌成因，以及被停牌上市公司的复牌/除牌程序及时间进行剖析。在下篇中，我们将重点针对上市公司因缺乏足够的业务和资产以支持其营运而被停牌的个案进行研究及总结。

（一）《主板上市规则》的停牌及除牌准则

联交所在2018年对上市公司的除牌机制进行了改革，对除牌的原因以及除牌的流程均做出了改善。目前主板上市公司的停牌及除牌规则主要依据《主板上市规则》（「《上市规则》」）的第6.01条以及联交所于2018年5月刊发的指引信HKEx-GL95-18（「GL95-18」）。

根据《上市规则》第6.01条，联交所可随时将任何证券停牌或除牌，以保障投资者及维持一个有秩序的市场。该条列明联交所可采取停牌或除牌行动的三个情况，包括：

§   联交所认为上市公司未能维持足够的公众持股量（详情请参阅《上市规则》第8.08(1)条）；

§   联交所认为上市公司所经营的业务没有足够的业务运作且没有相当价值的资产以支持其运营（详情请参阅《上市规则》第13.24条）；或 

§   联交所认为上市公司或其业务不再适合上市（详情请参阅《上市规则》第8.04条）。

另外，如上市公司的财务资料披露出现问题，也会导致停牌，包括：

§   根据《上市规则》第13.50条，如上市公司未能如期发表定期的财务资料，联交所一般会要求该上市公司的证券停牌直至其按规定公布财务资料。

§   根据自2019年起实施的《上市规则》第13.50A条，如上市公司发布年度初步业绩公告时，其核数师已经或表示将会就上市公司的财务报表发出「否定意见」或「无法表示意见」，联交所一般会要求该上市公司停牌直至有关问题解决。如「否定意见」或「无法表示意见」仅与上市公司的持续经营有关，则上市公司的股票则一般不会被停牌。

1.       未能维持足够的公众持股量

若上市公司是因公众持股量不足而遭停牌，通常可在相当短时间内解决问题。 停牌公司应立即制定及公布恢复最低公众持股量的具体及可行的行动计划，例如由控股或主要股东配售现有股份，或由上市公司配售新股份。行动计划应清楚列明计划中每个阶段工作的时间表，证明及确保可在合理时间内恢复所需最低公众持股量并复牌。联交所可在适当情况下就计划是否足够提供指引及就时间表提供意见。（详情请参阅GL95-18第47至51段）

2.       没有足够的业务运作或资产

上市公司未能遵守《上市规则》第13.24条的一般原因包括：上市公司已完全或大致上停止营运、只维持有限度的营运、或因财政困难或失去主要营运附属公司而停止所有或大部分营运。（详情请参阅GL95-18第21至23段）

3.       联交所认为上市公司或其业务不再适合上市

联交所认为不再适合上市的例子包括上市公司中具有重大影响力的董事或其他人员因涉及例如欺诈或其他类型的不诚实行为，上市公司存在重大内部控制失误，上市公司刊发的财务报表被裁定为夸大业务及盈利等 

4.       逾期刊发财务业绩或核数师发出「否定意见」或「无法表示意见」 

上市公司未能如期发表定期的财务资料或核数师发出「否定意见」或「无法表示意见」，当中可能涉及会计及企业管治方面有重大失当行为或内部监控方面有重大缺失。具体的原因可包括：核数师在审核流程中发现会计失当，被董事会、核数师、传媒、证监会等第三方揭发的企业不当行为（详情请参阅GL95-18第29至30段）。 

（二）被停牌上市公司的复牌/除牌程序及时间

在除牌机制改革前，根据《上市规则》第17项应用指引的规定，除牌程序由三阶段组成，每阶段最少为期6个月。实践中许多公司停牌状态维持超过36个月。但在2018年8月以后，除牌程序简化及加速，主板上市公司持续停牌18个月（创业板则为12个月），联交所即可将其除牌。

如GL95-18所述，为促进证券在市场上持续交易，停牌时间均应尽可能短。上市公司在停牌后应立即着手找出相关问题所在，并制定复牌计划，列出补救措施及工作时间表。而各被停牌的上市公司的复牌程序及所需时间亦会因应其被停牌的不同原因而有所差异。

1.       因逾期刊发财务业绩或其他原因而被停牌的上市公司的复牌/停牌程序及时间

若上市公司因逾期刊发财务业绩或其他原因及而被停牌，这些上市公司若能解决及已向市场公布导致其停牌的问题，便可申请复牌（详情请参阅GL95-18第33至38段）：

§  若上市公司延迟刊发财务业绩，待该上市公司完成处理其审计问题及就尚未刊发的财务业绩完成审计，并刊发所有逾期及/或尚未刊发的财务业绩后就能申请复牌。

§  若引致停牌的事宜涉及管理层及董事的诚信操守，该上市公司必须证明对管理层诚信可能会为股东或投资者带来风险或损害市场信心的忧虑并不存在（例如，对董事会作出所需变动）。

§  若有董事涉嫌卷入有关问题，考虑设立独立委员会检讨有关事宜。独立委员会亦应评估，在内部调查进行期间，涉事董事是能否仍然适合担任董事。

§  若涉及潜在欺诈活动（譬如虚假会计账目或挪用资产），委聘法证会计师进行调查。待法证调查有结果，董事会或独立委员会应考虑有关结果是否已足以解决相关问题。如仍未能解决，则再考虑应采取哪些进一步行动。

§  若涉及内部监控系统不足，委聘独立专家检讨内部监控系统，找出重大缺失并提出补救行动。

如联交所认为该些上市公司已解决及已向市场公布导致其停牌的问题，联交所可根据《上市规则》第6.07(1)条规定，要求该上市公司按联交所全权指令的条款和期限刊发公告，表示其短暂停牌或停牌证券将行复牌，并在公告刊发之后指令该上市公司复牌。联交亦可根据《上市规则》第6.07(2)条的规定，由其直接刊登该上市公司短暂停牌或停牌证券将行复牌的公告，并指令该上市公司复牌。

在另一方面，如该些上市公司不愿意采取行动解决相关的停牌事宜，联交所可继续将该公司停牌，甚至根据《上市规则》第6.01及6.01A(1)条将其除牌。一般而言，联交所会给予被停牌的上市公司18个月时间解决相关的停牌事宜。但联交所也有权给予少于18个月的期限。联交所在GL95-18中提及，如其认为停牌公司须补救的问题应可在少于18个月的期限内解决（例如公众持股量不足），或停牌公司未能采取足够行动补救，因而延长了停牌的时间，则联交所可以实施较18个月为短的补救期。

2.       因没足够的业务运作或资产而被停牌的上市公司的复牌/除牌程序及时间

因没足够的业务运作或资产而被停牌的上市公司通常会根据《上市规则》第6.01A(1)条的规定进入18个月的复牌程序。在停牌期间，上市公司有责任自行制定并公布复牌计划，并定期公布复牌进度及业务发展的最新资料。联交所则会监察上市公司的复牌状况及在适当情况下提供指引。

有别于过往第17项应用指引的规定，目前适用的18个月的复牌程序没有硬性规定联交所于每6个月审阅被停牌的上市公司所提交的复牌建议及该被停牌的上市公司实行其复牌建议的情况进展。此新项修改给予相关的被停牌上市公司更多弹性在被停牌后的18个月内提交并实行其复牌建议。在缩减了发行人完成复牌计划可用的时间的同时也鼓励被停牌的公司迅速采取行动。

被停牌的公司采取复牌行动后，须证明该上市公司拥有足够的资产及业务，重新符合《上市规则》第13.24条的规定，经联交所确认后才可以复牌。虽然《上市规则》并无量化准则，但有关业务必须为实质，业务模式必须为可行及可持续发展（详情请参阅下篇）。

3.       上市公司被停牌期间的披露责任

无论上市公司是因何原因而被停牌，停牌公司仍须遵守《上市规则》下的持续责任，包括须予披露的交易、关连交易、披露内幕消息等。而且，上市公司还须根据《上市规则》13.24A条在其尚未复牌期间定期刊发季度公告，从而向联交所及市场交代有关其停牌的发展情况。

4.       成功挑战除牌决定门槛極高

如停牌公司对联交所上市委员会的决定有异议，它可申请要求联交所上市复核委员会重新考虑该决定。但实际而言，由于上市复核委员会的决定是基于相同事实，若上市公司没有提供具说服力的理据，上市复核委员会很大机会维持原先決定。

近来因大量公司向上市复核委员会申请复核上市委员会所作的除牌决定或向香港法院就有关决定申请司法复核，使有关挑战数目飙升。然而，大比例的此类公司因未能证明其存在特殊情况以推翻联交所的决定或有必要延长18个月的规限，该等申请一再被拒绝。 

（三）已进入除牌程序或被停牌的上市公司数目统计

根据联交所的公开资讯，我们对2021年被停牌的上市公司进行了相应的统计及分析，以下为该统计及分析的概要。

1.       被停牌的原因/复牌条件的数目统计

于2021年（即截至2021年12月31日），约89家于联交所主板上市的上市公司被联交所列为停牌状态。当中约80家被停牌的上市公司的复牌条件包含「刊发逾期刊发财务业绩」，约81家被停牌的上市公司的复牌条件包含「证明公司符合《上市规则》第13.24条」，及约13家被停牌的上市公司的复牌条件包含「证明不存在有关管理层诚信操守的问题」。

(注(1)) 在这约80家因逾期刊发的财务业绩而被停牌的上市公司中，大部分均因未能于2021年3月31日或之前刊发其2020年的全年财务业绩而被停牌。部分上市公司解释，因新冠疫情持续严峻，其内部业务受到影响，因而未能准时刊发其财务业绩。在2020年初新冠疫情爆发初期，不少上市公司因受疫情或旅游限制措施影响而未能按时公布经审核的财务报表。为处理此等情况，2020年2月4日联交所与证监会共同发出《有关在严重新型传染性病原体呼吸系统病的旅游限制下刊发业绩公告的联合声明》（「联合声明」），允许受影响的上市公司在与联交所个别沟通的基础上刊发「未与其核数师议定的业绩公告或财务报表」，以符合于3月31日业绩发布的规定并继续交易。根据联交所于2022年2月21日更新的有关联合声明的常问问题及香港经济日报于2022年3月8日向联交所作出查询之回复，联交所将继续按联合声明的做法，按个别情况容许上市公司在发布「未与其核数师议定的业绩公告或财务报表」后继续交易。

(注(2)) 其他原因包括存在有关管理层诚信操守的问题或联交所对该上市公司的某些交易存疑并要上市公司就该交易作独立调查。

(注(3))于2021年（即截至2021年12月31日）约89家主板上市公司被列为停牌状态。当中的上市公司被停牌的原因或其复牌条件有所重复，如部分被停牌的上市公司的复牌条件同时包含「刊发逾期刊发的财务业绩」及「证明公司符合《上市规则》第13.24条」。

2.       相关的核数师的数目统计

(注(4)) 此数据以被停牌的上市公司于被停牌当日的核数师计算。

(注(5)) “其他“是指担任一间于2021年被停牌上市公司的核数师。

3.       停牌、复牌及除牌的数目统计

以下为于2021年1月1日被联交所列为停牌状态的上市公司，于截至2021年12月31日的状态：

4.       一般复牌的所需时间

我们对上表中的8家已成功复牌公司的复牌时间进行了统计，该些公司的平均复牌所需时间约为1年。

接下来，我们将在《港股除牌机制之解析（下篇）：因业务不足而停牌公司的复牌之路》进一步分析因未能维持足够业务运作而被停牌的上市公司的相关问题。感兴趣的读者敬请留意。

本文由本所企业融资部劳恒晃律师、张源辉律师、刘砚枫律师、叶庭宜律师及黄虹博士共同合著。如有任何疑问或需要进一步的信息，请联系我们的劳恒晃律师、张源辉律师或刘砚枫律师。

本文仅供参考之用。本文之内容不构成亦不应被视为法律意见。对于任何因资料不确或遗漏又或因根据或倚赖本文件所载资料所作决定、行动或不行动而引致的损失或损害，史蒂文生黄律师事务所概不负责。

本文由本所企业融资部劳恒晃律师、张源辉律师、刘砚枫律师、叶庭宜律师及黄虹博士共同合著。

1. The rising significance of digital assets and tokens in Hong Kong

Digital assets, cryptocurrencies and tokens have captured increasing attention in Hong Kong.  For instance, PwC Hong Kong has partnered up with the Sandbox in purchasing a virtual land in the Sandbox metaverse.  NFTs dominate the recent discussions in the blockchain ecosystem.  We also see massive development in the Hong Kong regulatory landscape – the Financial Services and the Treasury Bureau of Hong Kong (“FSTB”) published its consultation conclusion paper proposing a licence regime for virtual assets exchange (the “FSTB Conclusion Paper”) (see our news update here), the recent conclusion paper from the Hong Kong Monetary Authority (the “HKMA“)  focusing on payment-related stablecoins (see our news update here), and a couple of initiatives from the Hong Kong Securities and Futures Commission (“SFC”) on Virtual Assets Service Providers (“VASPs”) and Securities Token Offering (“STO”).  It is therefore important to discuss the different forms of digital assets and their regulatory implications in Hong Kong.

2. What are the different types of digital assets and tokens?

We outline below the various classifications of digital assets.  While by no means exhaustive, they serve as a useful starting point for our discussion.

Digital assets

Broadly speaking, a digital asset is an intangible asset that may be created, traded, and stored in a digital format.  It is a generic term which covers all forms/ classifications of assets to be illustrated below, such as virtual assets, cryptocurrencies, digital tokens, including non-fungible tokens (“NFTs”), and Central Bank Digital Currency (“CBDC”).

Virtual assets

According to the FSTB Conclusion Paper, virtual asset (“VA”) is a digital representation of value that: [1]

(i) is expressed as a unit of account or a store of economic value;

(ii) functions (or is intended to function) as a medium of exchange accepted by the public as payment for goods or services or for the discharge of a debt, or for investment purposes;

(iii) can be transferred, stored or traded electronically; and

(iv) is irrespective of the purported form of underlying assets and whether it is stable or not.

Based on the above definition and as will be further discussed below, the scope of VAs does not cover NFT.  For regulatory purposes, it does not include CBDC. 

VA is sometimes referred to as crypto-asset. There is no universal consensus among the community and the regulators as to which terminology prevails. For example, the term “VA” is deployed by the FSTB whereas “crypto-assets” is used by the HKMA.

Crypto-assets

According to the Financial Stability Board, crypto-asset refers to “a type of private digital asset that depends primarily on cryptography and distributed ledger or similar technology”.[2]

While it is used interchangeably with VAs, crypto-asset includes NFTs, which are a form of cryptographic tokens and not covered under the scope of VA.

Cryptocurrencies

A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it almost impracticable to counterfeit or double-spend. It is a sub-set of each of (i) virtual assets and (ii) crypto-assets. The most well-known examples are Bitcoin and Ethereum.

Our other observations are:-

• Cryptocurrencies are based on decentralised blockchain networks and distributed ledger technology.

• It usually refers to the coins or tokens which are fungible in nature (i.e. it is impossible to distinguish one from another of the same kind just by looking at the matter itself).  Due to this nature, they are in general treated as virtual commodities.

• Crypto-assets and cryptocurrencies are often used interchangeably.

• A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation. This distinguishes itself from CBDC.

However, in practice, cryptocurrencies are not fully insusceptible to regulatory actions. In September 2021, the People’s Bank of China announced a blanket ban on all cryptocurrency transactions and mining.  Overseas exchanges are barred from providing services to PRC-based investors.  It also prohibited financial institutions, payment companies and internet firms from facilitating cryptocurrency trading in the PRC.

Stablecoins

Stablecoins are a sub-set of crypto-assets. According to the FSB and the Bank for International Settlements, stablecoins are defined as “a crypto-asset that aims to maintain a stable value relative to a specified asset, or a pool or basket of assets” and “cryptocurrencies with values tied to fiat currencies or other assets” respectively.[3]

Stablecoins can be designed for different purposes with a corresponding backing mechanism. It could be broadly categorised as (i) asset-linked stablecoins; or (ii) algorithm-based stablecoins.  Asset-linked stablecoins are usually pegged to or backed by fiat currencies, commodities (e.g. gold), or other financial assets (e.g. securities). If they are linked to financial assets, arguably they can be considered as securities tokens as well.

CBDC

Unlike stablecoins, CBDC is “a digital form of central bank money that is different from balances in traditional reserve or settlement accounts”.[4] It is a digital payment instrument, denominated in the national unit of account, that is a direct liability of the central bank.  It has a legal status, which distinguishes itself from cryptocurrencies (which are generally decentralised in nature).

The HKMA has explored a technology architecture of CBDC designed to enable households and businesses to hold and make payments with CBDC more safely.

Tokens

Tokens (or cryptographic/ digital tokens) are a digital representation of a physical asset or a utility that blockchain-based organisations or projects develop on top of existing blockchain networks.  A token can have different natures and purposes at the same time.

Other features/ observations include:-

• They can be smart contract embedded.

• The most popular blockchain network for token issuance is the Ethereum (which may be referred to as the blockchain network or the native currency used in such network).

• They are often created on a blockchain protocol (i.e. a set of rules governing the creation and use of such tokens).

• ERC-20 has become the most popular protocol used for the smart contracts on the Ethereum blockchain for token implementation.

• They come in different flavours – utility tokens, security tokens as well as the recently popular non-fungible tokens (“NFTs”), to name a few.

• Notably, NFTs are non-fungible – meaning that each NFT can be made “unique” via the applicable blockchain smart contracted embedded protocol.  Also, since we do not have a standardised form of NFTs at this stage, we would need to have a close look at a particular NFT in order to ascertain its nature.

3. Why is it important to understand the different nature of digital assets?

Such categorisation is useful in understanding the nature of tokens for discussion purpose.  Indeed, depending on the circumstances, the issue of digital assets may or may not attract jurisdiction from the SFC.

Taking NFTs as an example, given the non-standardised nature, some NFTs may be granted with “security”-like features and thus the issue of which would normally be regulated in Hong Kong.  Whether it attracts regulatory scrutiny would require us to take a close look at not only the form but also the substance of such tokens.

Of course, regulation is not necessarily a bad thing – if the token constitutes a “security”, the token holder should deserve additional protection as an investor.  On the other hand, it is important to strike a delicate balance between investor protection and over-regulation.  Given the technicality involved, we encourage issuers especially start-ups to seek advice from professionals in order to understand their relevant legal positions and structure their token issuances accordingly.

If you have any specific plans to conduct a token offering, or would just like to have a general discussion on the above, please feel free to contact our Partner Mr. Rodney Teoh.

This newsletter is for information purposes only. Its content does not constitute legal advice and should not be treated as such.  Stevenson, Wong & Co. will not be liable to you in respect of any special, indirect or consequential loss or damage arising from or in connection with any decision made, action or inaction taken in reliance on the information set out herein.

Background

On 19 November 2021, The Stock Exchange of Hong Kong Limited (the “Exchange”) published its consultation conclusions (the “Consultation Conclusions”) as to its proposal to enhance and streamline the listing regime for overseas issuers.  The amended Rules Governing the Listing of Securities on the Exchange (the “Listing Rules”) and the new guidance materials become effective from 1 January 2022.

The said proposals received large support from the public.  As such, the Exchange has concluded to adopt all the proposals outlined in its consultation paper on enhancing and streamlining the listing regime for overseas issuers on 31 March 2021 (the “Consultation Paper”) with minor modifications.  This article follows up with our news update in April 2021 on the Exchange’s Consultation Paper.  The capitalised terms used herein shall have the same meaning as defined in the Consultation Conclusions and Consultation Paper.  

In summary, the revised listing regime will be based on the following: 

• Streamlining shareholder protection standards into one set of “Core Standards”;
• Relaxing requirements on secondary listing regime for non-WVR Greater China Issuers, (a) without demonstration as an “innovative company”; and (b) lowering the minimum market capitalisation at listing than currently required;
• Allowing Grandfathered Greater China Issuers and Non-Greater China Issuers eligible for secondary listing with their existing WVR and/or variable interest entity structures to opt for a dual primary listing; and
• Publishing new guidance materials for secondary listed issuers.

Key Summary of the Revised Listing Regime

The key points of the revised listing regime of Overseas Issuers are set out as follows.  

Core Shareholder Protection Standards

1. the notice and conduct of general meetings; 
2. members’ right to remove directors, requisition a meeting, vote, speak and appoint proxies or corporate representatives; 
3. the reservation of auditor appointment, etc. to a committee independent of the board of directors of a company or a majority of the shareholders and the reservation of certain other material matters to supermajority votes by shareholders; 
4. restrictions on the term of a director appointed to fill a casual vacancy; 
5. availability of the shareholders’ register for inspection; and
6. restrictions on shareholder voting on certain matters required by the Listing Rules.  

Dual Primary Listing

Secondary Listing Requirements

Criteria A 

1. a track record of good regulatory compliance of at least five full financial years on a Qualifying Exchange (for any Overseas Issuer without a WVR structure) or on any Recognised Stock Exchange (only for Overseas Issuers without a WVR structure and without a centre of gravity in Greater China); and 
2. an expected market capitalisation at the time of secondary listing of at least HK$3 billion. 

Criteria B

1. a track record of good regulatory compliance of at least two full financial years on a Qualifying Exchange; and 
2. an expected market capitalisation at the time of secondary listing of at least HK$10 billion.

Secondary listed issuers’ conversion to primary listing status

• Route 1 – For issuers delisted from the overseas exchange: 
  1. A 12-month automatic grace period available for the preparation of financial statements in accordance with HKFRS/ IFRS upon delisting from the primary listing market.
  2. Automatic Waivers will be disapplied in respect of other Listing Rules upon being delisted from the primary listing market.
  3. Regarding involuntary delisting from the overseas exchange, transitional arrangements shall apply for continuing transactions which are entered into before the issuer’s notification of the involuntary delisting to the Exchange so that the transactions are exempt from applicable Listing Rules for 3 years from the date of the delisting notification. 
  4. In the event that an Overseas Issuer expects difficulty in complying with specific applicable Listing Rules, a grace period may be granted on a case-by-case basis. The Exchange reserves the power to require the issuer’s stock short name to include a special stock marker (TP) to indicate that the issuer is a primary listed issuer under transitional arrangements.

• Route 2 – For issuers that become primary listed in Hong Kong as a result of Migration: 
  1. Upon the majority of trading in the Overseas Issuer’s listed shares (i.e. 55% or more of the total worldwide trading volume, by dollar value, of those shares) migrates to the Exchange’s markets on a permanent basis over the overseas issuer’s most recent financial year, all Automatic Waivers will be revoked subject to the existing transitional arrangements of Chapter 19C.

• Route 3 – For issuers that become dual primary listed in Hong Kong as a result of Primary Conversion:
  1. All Automatic Waivers shall be revoked upon the effective date of Primary Conversion and a grace period for full compliance with the Listing Rules will not normally be allowed.

Analysis and Takeaways

The revised listing regime enhances and streamlines the Exchange’s approach to Overseas Issuer listings as a whole.  It clarifies the applicable requirements, thereby creating incentives for overseas issuers primary listed elsewhere to explore possibilities of applying for dual primary listing or secondary listing on the Exchange.  Some of the more restrictive requirements for issuers with a centre of gravity in Greater China have been removed, and it is expected to attract more US-listed Greater China Issuers to seek “homecoming” secondary listing attempts on the Exchange.

Please contact our Partner Mr. Rodney Teoh for any enquiries or further information.

This newsletter is for information purposes only. Its content does not constitute legal advice and should not be treated as such. Stevenson, Wong & Co. will not be liable to you in respect of any special, indirect or consequential loss or damage arising from or in connection with any decision made, action or inaction taken in reliance on the information set out herein.

Introduction

On 1 November 2018, the Securities and Futures Commission (the “SFC”) released the “Statement on Regulatory Framework for Virtual Asset Portfolios Managers, Fund Distributors and Trading Platform Operators” (the “Statement”). The Statement, together with its appendices entitled “Regulatory standards for licensed corporations managing virtual asset portfolios” (Appendix 1) and “Conceptual framework for the potential regulation of virtual asset trading platform operators” (Appendix 2) and also a circular to the intermediaries on “Distribution of Virtual Asset Funds” (the “Circular”) issued on the same date (altogether, the “Regulatory Documents”) provide a summary of the regulatory standards applicable to virtual asset portfolio managers, fund distributors and trading platform operators. They also clarify SFC’s regulatory stance and approach towards the involvement of digital assets in investment activities.

The SFC reminds the intermediaries of the importance of having reference to the relevant requirements set out in the Regulatory Documents by the more recent release of the “Statement on Security Token Offering” on 28 March 2019.  The Statement reminds intermediaries to observe and ensure compliance with the requirements similar to those set out in the Circular before they engage in the distribution of security token offerings (STOs). Failure to do so may affect their fitness and properness to remain licensed or registered and may result in disciplinary action by the SFC.

Background

Set out below are the material announcements or statements released or actions taken by the SFC in relation to the regulation of virtual assets or commodities leading to the release of the Regulatory Documents:-

On the other hand, on 28 March 2019, the SFC released the “Statement on Security Token Offering”, which reminds market participants that licensing and registration requirements shall apply to the marketing and distribution of security tokens that are “securities” (unless applicable exemption applies).

In this update, we will focus on the SFC’s regulatory approach on virtual asset portfolio managers, fund distributors and trading platform operator.

Status of virtual assets and virtual asset funds

The Regulatory Documents have not provided an exhaustive list of virtual assets which constitute “securities” or “futures contracts”. Whether certain virtual assets constitute “securities” or “futures contracts” shall remain to be determined on a case by case basis in the light of the terms and features of that particular kind of virtual assets. The SFC has quoted in the past the following examples of virtual assets being “securities”[1]:-

(1)         Digital tokens representing equity or ownership interests in a corporation such as tokens which give holders shareholders’ rights including the right to receive dividends and the right to participate in the distribution of the corporation’s surplus assets upon winding up;

(2)         Digital tokens used to create or to acknowledge a debt or liability owed by the issuer, such that an issuer may repay token holders the principal of their investment on a fixed date or upon redemption, with interest paid to token holders; and

(3)         Digital tokens the proceeds of which are managed collectively by the ICO scheme operator to invest in projects with an aim to enable token holders to participate in a share of the returns provided by the project (which is regarded by the SFC as a CIS).

In the Black Cell Incident, the SFC identified, among others, the following characteristics of the ICO concerned:-

(i)            The ICO was for the sale of digital tokens to investors through its website accessible by the Hong Kong public;

(ii)          The ICO was with the pitch that the ICO proceeds would be used to fund the development of a mobile application; and

(iii)         Holders of the tokens will be eligible to redeem equity shares of Black Cell.

Further, interest in a fund investing in the virtual assets, being interest in a CIS, shall also constitute “securities” as defined under the SFO.

Summary of the new regulatory standards for licensed corporations managing and distributing virtual asset portfolios

The SFC clarified in the Regulatory Documents that distributing a fund that invests solely in virtual assets which do not amount to “securities” or “futures contracts” requires a licence of Type 1 regulated activity (dealing in securities).  It further announced that all licensed corporations investing or intending to invest in virtual assets exceeding 10% of the gross asset value of the portfolio in virtual assets, and distribute the same, should be subject to a set of standard terms and conditions (the “Terms and Conditions”) (subject to minor variations and elaborations depending on the licensed corporations’ business models), irrespective of whether the virtual assets involved amount to “securities” or “futures contracts”.

The Terms and Conditions will be imposed by way of licensing conditions, a summary of which is set out below.

Additional requirements regarding (1) selling restrictions and concentration assessments; (2) due diligence on the virtual asset funds; and (3) information for clients set out therein are also imposed on licensed corporations distributing virtual asset funds which are not authorised by the SFC.

Practical aspects concerning the application of the new Terms and Conditions

On 1 June 2018, the SFC has issued a circular to remind intermediaries to notify the SFC regarding changes to be introduced to their business activities to provide trading and asset management services involving crypto-assets as well as robo-advisory financial services. The positive obligation to notify continues to apply to licensed corporations. Specifically, the Regulatory Documents, require the licence applicants and licensed corporations to inform the SFC (i) if they are presently managing, or planning to manage, one or more portfolios that invest in virtual assets; or (ii) if they intend to hold virtual assets on behalf of the portfolios under their management.

Upon being aware of any firm managing or planning to manage virtual asset portfolios, the SFC will first seek to understand the firm’s business activities.

If the firm appears to be capable of meeting the expected regulatory standards, the standard Terms and Conditions will be provided to the firm and the SFC will discuss and vary them with the firm in light of its business model so as to ensure that the Terms and Conditions applicable to the firm are reasonable and appropriate.

If a licence applicant does not agree to comply with the proposed terms and conditions, its licensing application will be rejected. Similarly, if an existing licensed corporation does not agree to comply with the proposed terms and conditions, it shall not manage any virtual asset portfolios. If any such licensed corporation is presently managing virtual asset portfolios, it will be required to unwind the virtual asset positions in these portfolios within a reasonable period of time, taking due account of the interests of the portfolios’ investors.

After the licence applicant or licensed corporation has agreed with the proposed Terms and Conditions, they will be imposed through licensing conditions. Failure to comply with them may be considered as misconduct under the SFO. The SFC considers that this will reflect adversely on a licensed corporation’s fitness and properness and may result in the SFC taking regulatory action.

The potential regulation of virtual asset trading platform operators

The SFC has also issued the “Conceptual framework for the potential regulation of virtual asset trading platform operators” among the Regulatory Documents (the “Conceptual Framework”), which sets out SFC’s regulatory approach to virtual asset trading platforms (commonly known as cryptocurrency exchanges).

Virtual asset trading platforms are online platforms which match buyers’ and sellers’ orders for trading in virtual assets, and they perform functions similar to traditional securities brokers, stock exchanges and private trading venues (e.g., alternative liquidity pools). Investors usually buy, sell or trade virtual assets on these platforms.

In the Conceptual Framework, the SFC indicated that it is now at the initial exploratory stage to explore how virtual asset platform operators (the “Platform Operators”) can be regulated. Interested Platform Operators who are committed to adhering to the SFC’s high standards may opt into the SFC Regulatory Sandbox (the “Sandbox”), through which the SFC would discuss its expected regulatory standards with the Platform Operators and observe the live operations of the virtual asset trading platforms in light of these standards. If the SFC makes a positive determination, it would then consider granting a licence to a qualified Platform Operator, subject to licensing conditions.

Should the SFC conclude that it may grant a licence to a qualified Platform Operator, the Platform Operator is expected to comply with the SFO, the Code of Conduct and all applicable guidelines, circulars and frequently asked questions published by the SFC from time to time. Additionally, the SFC will impose certain licensing conditions under section 116(6) of the SFO to address the specific risks associated with a Platform Operator’s operations.

The Conceptual Framework further sets out five core principles and other specific terms and conditions which are likely to be included as licensing conditions, subject to modifications and discussion between the SFC and the Platform Operator in the Sandbox. These core principles include:

(1)         Carrying out all virtual asset trading business activities (the “Relevant Activities”) under a single legal entity licensed by the SFC;

(2)         Complying with all applicable regulatory requirements for all Relevant Activities, notwithstanding that the activities may not relate to virtual assets which are “securities”;

(3)         provision of services only to “professional investors”;

(4)         admitting a virtual asset issued by way of an initial coin offering for trading on its platform at least 12 months after the completion of the ICO or when the ICO project has started to generate profit, whichever is earlier; and

(5)         executing a trade for a client only if there are sufficient fiat currencies or virtual assets in his account with the platform to cover that trade.

Proposed terms and conditions

In addition to the core principles, where the existing requirements may not be directly applicable or where the SFC considers enhanced investor protection measures necessary, the SFC may impose as licensing conditions additional terms and conditions in respect of:-

(1)         financial soundness of the Platform Operator;

(2)         taking out of insurance policy by the Platform Operator;

(3)         assessment of client’s knowledge of virtual assets;

(4)         adoption of anti-money laundering and counter-financing of terrorism systems;

(5)         disclosure of nature and risks in trading the virtual assets, fees chargeable by the Platform Operators, etc.;

(6)         due diligence to be performed on the virtual assets;

(7)         preparation and publication of trading rules governing its platform operations;

(8)         prevention of market manipulative and abusive activities;

(9)         establishment and maintenance of policies and procedures governing employees’ dealings;

(10)      proprietary trading;

(11)      segregation and custody of clients’ money and virtual assets; and

(12)      ongoing reporting obligations.

Way forward

To market participants and the legal community, the Regulatory Documents represent an attempt by the SFC to further develop its approach towards the regulation of digital assets in investment activities.

In view of the positive obligations to notify the SFC in relation to their intention to maintain portfolios that invest in virtual assets and other material changes to portfolios that are under their management, licensed corporations should be vigilant and take steps to ensure that they comply with the requirements in force and applicable licensing conditions.

Overall, since the SFC is still developing its regulatory stance and approach, more policies and legal changes may be underway. Market participants shall stay alert to further changes and assess the relevant impacts on their businesses. Whilst some official avenues, such as the Regulatory Sandbox, are available for market participants to understand details of the relevant new arrangement, it may be advisable in the circumstances to consult professional legal advice first before engaging in a dialogue with the regulator.

This newsletter is for information purposes only. Its content does not constitute legal advice, and should not be treated as such. Stevenson, Wong & Co. will not be liable to you in respect of any special, indirect or consequential loss or damage arising from or in connection with any decision made, action or inaction taken in reliance on the information set out herein.

Please contact our Hank Lo or Rodney Teoh for any enquiries or further information.

Background

On 22 March 2019, the Exchange published a listing decision (LD121-2019) to provide guidance on the reasons for rejecting 24 listing applications. The Exchange acknowledged that there was a noticeable increase in the number of listing applications rejected in 2018 as compared to previous years. The aforementioned increase was due to a heightened level of scrutiny exercised by the Exchange in its assessment of suitability of listing applicants (the “Applicant(s)”), and the exercise of its discretion to determine whether there are facts and circumstances to form a reasonable basis to believe that the Applicants are likely to invite speculative trading upon listing or to be acquired for their listing status. The Exchange placed particular emphasis on the Applicants’ (1) commercial rationale for listing and whether there was a genuine need for funding, and (2) valuation and the methodology used, when vetting the listing applications.

Summary

The table below provides a summary of the reasons for rejection raised by the Exchange:

Conclusion

The listing decision reflects (1) the change in the Exchange’s listing reviewing process; and (2) the new initiatives of the Exchange shown in recent developments such as (a) the GEM Listing Rules amendments in February 2018; and (b) the Consultation Paper regarding Backdoor Listing published in June 2018. For further details, please refer to our news updates published on 5 March 2018 and 11 September 2018.

This newsletter is for information purposes only.  Its content does not constitute legal advice, and should not be treated as such.  Stevenson, Wong & Co. will not be liable to you in respect of any special, indirect or consequential loss or damage.

Please contact our Hank Lo or Rodney Teoh for any enquiries or further information.